Plexus(US:PLXS)2025-07-23 20:21Financial Performance - Plexus reported fiscal third quarter 2025 revenue of $1.018 billion, with a GAAP operating margin of 5.3% and diluted EPS of $1.64[5] - Non-GAAP operating margin for the third quarter was 6.0%, and non-GAAP diluted EPS was $1.90, excluding $0.26 of stock-based compensation expense[5] - Net sales for Q3 2025 reached $1,018,308, an increase of 6.0% compared to $960,751 in Q3 2024[20] - Gross profit for Q3 2025 was $103,288, representing a gross margin of 10.1%, up from $94,415 and a margin of 9.8% in Q3 2024[20] - Operating income for Q3 2025 increased to $53,608, a 36.6% rise from $39,246 in Q3 2024[20] - Net income for Q3 2025 was $45,116, compared to $25,140 in Q3 2024, marking an increase of 79.5%[20] - Diluted earnings per share for Q3 2025 were $1.64, up from $0.91 in Q3 2024, reflecting an increase of 80.2%[20] - Non-GAAP operating income for Q3 2025 was $61,299, compared to $55,670 in Q3 2024, an increase of 10.3%[24] - Adjusted diluted earnings per share for Q3 2025 were $1.90, up from $1.45 in Q3 2024, reflecting an increase of 31.0%[24] - Adjusted operating income for the nine months ended June 28, 2025, was $153,942 million, compared to $135,023 million for the same period in 2024, reflecting a year-over-year increase of approximately 14%[29] - The adjusted operating income (tax-effected) for the nine months ended June 28, 2025, was $182,678 million, compared to $151,227 million in the same period of 2024, marking a year-over-year increase of approximately 21%[29] Guidance and Future Outlook - The company initiated fiscal fourth quarter 2025 revenue guidance of $1.025 billion to $1.065 billion, with GAAP diluted EPS guidance of $1.57 to $1.72[5] - Plexus secured 41 manufacturing programs during the quarter, representing $250 million in annualized revenue when fully ramped into production[6] Cash Flow and Capital Management - Free cash flow for the third quarter was $13.2 million, contributing to year-to-date free cash flow of $56.8 million[6] - The cash cycle for the third quarter was 69 days, consistent with expectations and one day higher than the previous quarter[7] - Return on invested capital (ROIC) for the third quarter was 14.1%, exceeding the weighted average cost of capital by 520 basis points[7] - The company's ROIC for the nine months ended June 28, 2025, was 14.1%, up from 10.4% in the same period of the previous year, indicating improved capital efficiency[29] - The average invested capital as of June 28, 2025, was $1,364,073 million, an increase from $1,262,612 million in the previous year, showing a growth of about 8%[29] - Cash and cash equivalents as of June 28, 2025, were $237,567 million, a decrease from $317,161 million in the previous year, reflecting a tighter liquidity position[29] Shareholder Returns - Plexus has initiated a new $100 million share repurchase program, following the completion of a previous $50 million program[6] Sector Performance - Revenue from the Aerospace/Defense sector was $183 million, while Healthcare/Life Sciences and Industrial sectors generated $420 million and $415 million, respectively[10] - The top 10 customers comprised 48% of revenue during the third quarter, down three percentage points from the previous quarter[9] Balance Sheet Highlights - Total current assets decreased to $2,395,068 from $2,477,150 as of September 28, 2024, a decline of 3.3%[22] - Total liabilities decreased to $1,686,548 from $1,828,996, a reduction of 7.8%[22] - Shareholders' equity increased to $1,419,085 from $1,324,825, an increase of 7.1%[22] Tax and Economic Performance - The adjusted effective tax rate decreased to 11% for the nine months ended June 28, 2025, down from 16% in the same period of 2024, which positively impacted net income[29] - Economic return for the nine months ended June 28, 2025, was 5.2%, compared to 2.2% in the same period of the previous year, indicating a significant improvement in economic performance[29] Restructuring Charges - The company reported a restructuring and other charges of $4,683 million for the nine months ended June 28, 2025, which is consistent with the previous period[29]